Liberty inches closer to Fairfield County with Southern Bank buy

Middletown-based Liberty Bank, the state’s largest mutually held financial institution, announced Wednesday it is acquiring The Bank of Southern Connecticut for $11 million.

Liberty Bank, with $3.5 billion in assets, is still owned by a mutual holding company and is the third largest Connecticut headquartered bank in the state. Only People’s and Webster are larger.

The agreement with Southern gives Liberty branches in New Haven, a branch in North Haven and one in Branford. Liberty operates 44 branches in Connecticut. It is paying $3.76 per share to stockholders in Southern.

If the merger does not take place, Liberty will get paid $450,000 for its troubles. In November of 2010, Southern terminated an agreement to merge with Naugatuck Valley Savings.

Liberty has been gradually expanding across the state for a decade, but as of yet, has not crossed into Fairfield County. But this puts them in striking business.